The Worst Factory: Still No Response

Wednesday, June 21, 2017

The Huajian factory in Jiangxi, which recently captured media attention for its abuses and connection to Ivanka Trump's brand, as well as the disappearance of three China Labor Watch investigators examining facilities, is the worst among the dozens of factories we have investigated over the past year. China Labor Watch wrote to Ivanka Trump on June 6, hoping that she could assist in the release of the investigators and also join hands with other brands in improving the plant's working conditions. The organization also wrote to NINE WEST, Vince Camuto, KARL LAGERFELD, EASY SPIRIT, NATURALIZER, MARC FISHER, and GUESS, which, according to our investigation, were also supplied by Huajian at that time. So far, we have heard nothing.

Huajian is not just another plant in China bending the rules. Its abuses are severe. When our investigation was ongoing, employees at Huajian started work at 7:10amand usually finished at 10pm, putting in 15 hours a day, with only two days off in a month. Some had to work as long as 18 hours a day. We were told by workers that they were frequently verbally abused by the management with words like "son of a bitch" and "blind ass" and told to "fuck off." Language discriminatory and insulting to female workers was also used. Some workers said that they had even been hit by management.

Labor rights were violated in subtler ways, too. Because of Huajian's piece rate system, workers were not eligible for any overtime compensation, and therefore some were paid only about 2400 yuan ($352) for 350 working hours a month, which is lower than what China's Labor Law stipulates. The factory also held workers' wages for roughly one month. For example, wages from March 1 to March 30 would not be given to workers until April 27. In most cases, resignation was not allowed and workers were left with only one choice, voluntary termination of employment, under which circumstance wages from the last month would be deducted. One worker who left in March - the factory was still a supplier of Ivanka Trump-branded shoes then - told us over the phone that he did not even have his wages from March on the April pay day.

The factory was furthermore hiding its abuses. It obviously faked its wage records: newly hired employees were asked to sign fraudulent pay stubs.

These problems continued at least until very recently. The investigators of China Labor Watch started work at Huajian on April 25 and, like other newly recruited employees, were asked to sign several fake pay stubs. On May 23, because of a brand representative's demand that products be reworked due to their inferior quality, workers on that EASY SPIRIT production line were compelled to work until 1:30am the next day but with no overtime pay given the piece rate system.

Huajian does not generally manufacture any particular brand continuously. For example, it was a supplier of Ivanka Trump-branded shoes from October to December in 2016 and then once more in March, 2017. We have evidence showing that the factory is (or at least was) scheduled to manufacture shoes for Ivanka Trump again in May and June. However, because our investigators are now under criminal detention, we are not certain whether the factory will continue with this plan.

China Labor Watch has written to Ivanka Trump and the other relevant brands to provide them with details about the situation, but we are still waiting for their response. We also wrote to Ms. Trump earlier, on April 27, regarding the conditions of the factory, but did not hear from her then, either.

Li Qiang, Executive Director of China Labor Watch said, "Huajian is being targeted because it takes advantage of workers and has violated China's Labor Law and the ethical sourcing policies followed worldwide. Our aim in sending investigators to Huajian was to collect evidence of abuses and thereby improve the factory. China Labor Watch believes that it is important that independent investigators are able to assess the conditions of multinational brand's suppliers in China and work to eliminate labor rights infringements. We hope that the brands sourcing from Huajian will cooperate with us in working to secure the release of our investigators."

Two Letter From China Labor Watch to Ms. Ivanka Trump

June 6, 2017

Ivanka Trump

Assistant to the President

The White House

1600 Pennsylvania Avenue NW

Washington, DC 20500

Ms. Ivanka Trump,

You might have heard that three investigators of ours have been criminally detained on charge of unlawful use of devices for eavesdropping or secret photographing because of the investigation conducted towards your factories in China. They are currently held in detentionand not allowed for family visit by the police.

I have here in the flash drive some footage and photos from the investigation as part of the materials our investigators collected from the factory -- they are detained for searching for these evidence. In the past 17 years, China Labor Watch has conductedhundreds of factory investigations and yet this is the first time our investigators face criminal detention. We believe the reason to that is pertaining to the supplier factories of your brands particularly.

We would highly appreciate that if you could use your influence to help us advocate for the release of our investigators. If you need more information, please feel free to contact me via phone 917-257-8589 or email clw@chinalaborwatch.org

Sincerely Yours,

Li Qiang

Executive Director, China Labor Watch

June 6, 2017

Ivanka Trump

Assistant to the President

The White House

1600 Pennsylvania Avenue NW

Washington, DC 20500

Ms. Ivanka Trump,

I am the Executive Director of China Labor Watch, an international NGO with headquarters in New York that advocates for labor rights. Over the past 17 years, my organization has dedicated itself to improving transparency around the working conditions of Chinese factories supplying multinational brands. Between May 2016 and May 2017, we investigated two of your company’s suppliers, one in Ganzhou, Jiangxi and one in Dongguan, Guangdong. During our research, we documented the following labor rights and Chinese labor law infringements in the Ganzhou factory.

Extreme Working Conditions

The factory operated based on day-shift work schedules, which were from 7:10 to 11:30, from 13:30 to 17:40, and from 18:20 until workers got off. Workers usually got off after 22:00. Different production units staggered their hours.

Workers must punch their cards when going to and getting off work. The factory usually required employees to arrive at 7:10 for a morning meeting. However, morning meetings did not count towards the employee's working hours, which officially started at 7:30. Workers got off at 17:40, and were required to attend a 10-minute evening meeting before leaving, which again did not count towards their working hours. Moreover, workers’ salary was calculated based on a piece-rate system. Overtime hours started at 18:20. In May 2017, workers usually got off work after 22:00.

The common overtime hours ranged from four to five hours each day, with the longest being close to eight hours. The longest daily working hours at the factory was 18 hours and 20 minutes. On May 23, under a brand representative’s demand of rework, workers in the Production Unit No.2 worked from 7:10 to 1:30 the next day. However, the factory still required the employees to show up for work at 7:10 the same day, leaving less than 6 hours for the workers to rest. Furthermore, the working schedule remained as usual. Since May was a busy season with overflowing orders, this was not uncommon -- the employees worked past midnight more than three times. Again, since their salary was calculated by piece, they did not get overtime pay.

Employees worked for over 350 hours in May. Except for two public holidays, they did not have another day off during the month. They were only able to take a half day off on May 21, and were called back to work at 18:00.

When workers expressed fatigue due to long working hours, the management would allow a one or two days leave. However, if the workers asked for more time off, the management would decline their request and use large order volumes as an excuse. Under this circumstance, workers would have no choice but to leave work without official permission. If workers were absent without permission for three times, they would be considered to have voluntarily terminated their employment, in which case no pay or compensation would be given.

Unethical Underpayment

During recruitment, workers signed contracts that promised salaries calculated based on an hourly-rate system. In reality, salaries were calculated based on a piece rate system and varied based on different job positions. This led to significant unethical underpayment. Under the piece rate system, workers did not have guaranteed base pay. They could only secure the base pay by reaching their individual monthly quota imposed by the factory. This could often be challenging during busy season when quota was significantly higher. In this case, workers had to work overtime to reach the quota for the base pay. Since they did not get paid by hour, the extra hours put in did not generate overtime pay. Some of the newly hired workers could be paid less than 2,500 RMB per month if they were lagging behind the production goal. In other words, their overtime was only to secure the measly base pay and was not eligible for any compensation. The factory was suppressing salary, justifying the long hours and taking advantage of the workers through the piece rate system.

Factories were operated based on assembly line mode of production. This meant with higher order volume, production was likely to be slower at first as the workers were getting used to the operation. For example, workers yielding 1,000 pairs of shoes per day in the beginning could produce 1,800 pairs per day as they became more experienced. Therefore, workers’ salaries were closely associated with order volumes. They could have higher pay in case of large orders because they could achieve higher productivity once they became familiar with the production. However, if the factory only had small orders during the month, the productivity would remain relatively low and workers get paid less. Facing lower order volume, even the experienced workers could only earn 2,500 RMB per month. When the order volume was stable, experienced workers’ monthly income ranged from 3,100 RMB to 3,500 RMB.

Forged Pay Stubs

Many factory workers were asked to sign on fake pay stubs, the salary indicated on which was higher than the actual pay they received. In one of the footage, we captured the factory trainer demanding each newly hired worker to sign on dozens of pay stubs with different names on.

Restrictions on Resignation

Though not explicitly stipulated by the factory, salaries from the last month were deducted if workers chose to leave within three months. Salary was calculated on the 30th of each month, but would not be given to workers until the 27th of the next month. If one resigned, his salary from the last month could not be calculated. Given the overwhelmingly long working hours with no day off in a month, if workers could not be approved for a leave, they had no choice but to be absent from work without permission. However, the factory stipulated that three days of absence constituted voluntary employment termination, which meant walking away with no pay. In this way, the workers felt compelled to stay at the factory.

Inappropriate Use of Student Workers

In a working hours record we obtained, there was an attendance sheet for over ten student workers who were indicated as preschool education major. These students were from Huajian Vocational Middle School. We had photos of student workers taken at the factory but were uncertain about their actual ages. Based on the age of average vocational school students who got into vocational schools after graduating from junior high, the student workers should be between 15 and 19 years old.

According to the information we obtained from the workers, due to the discrepancy between their majors and actual factory job description, plus overtime work, some students went to the local labor bureau to complain about the factory. The bureau then sent officers to investigate the factory. Since May 15, there were no student workers at the factory.

Verbal Abuse of Workers by Management

The management always verbally abused workers, saying things such as “piss off”. We had footage that captured the management cursing workers several times and smashing products onto the ground.

Female Workers’ Violated Rights

Compared to males, female workers were being treated worse in the factory. (In China, it is often the practice, and is even legally provided in certain provinces, for females to take leave from work due to the fatigue and discomfort (cramps) caused by menstruation.) In this factory, however, it was hard for them to have a day off and they had to work overtime, even during menstruation. One female worker suffering from metritis had to resign because she could not get a sick leave.

Pay Deductions

With little hope in getting an approved leave, workers had to skip work. Being absent for a day without permission led to a 120 RMB deduction. If one was late for morning shift, there would be a 10 RMB deduction. If late for more than 10 minutes, it would be a 30 RMB deduction. Being late for morning shift meetings also resulted in a 10 RMB deduction.

I hope that you understand the urgency of this matter. China Labor Watch expects you, as an assistant to the president and an advocate for women’s rights, to urge your brand’s supplier factories to improve their conditions. Your words and deeds can make a difference in these workers’ lives. I look forward to your response, My Email is clw@chinalaborwatch.org, and my phone number is 917-257-8589.

1. The factory operated based on day-shift work schedules, from 7:10 to 11:30, 13:30 to 17:40, and 18:30 until workers got off. Workers, however, usually got off after 22:00. This means three to four hours of overtime every day, with the longest daily working hours reaching 18 hours and 20 minutes.

2. The factory demands that workers attend morning meetings before work, but does not include this time in workers’ wage.

3. During recruitment, workers signed contracts that promised salaries calculated by hour. In reality, workers were paid by piece created and did not earn the guaranteed base pay unless they reached their individual monthly quota, sometimes significantly high, which was imposed by the factory.

4. Many factory workers were asked to sign fake pay stubs, with the salary indicated higher than the pay received.

5. Salary was calculated on the 30th of each month, but would not be given to workers until the 27th of the next month.

7. With work hours not properly stipulated by the factory, workers had to skip work if they desired time off. Absence led to a 120 RMB deduction; being late for morning meetings or morning shift, a 10 RMB deduction; and being late for more than 10 minutes, a 30 RMB deduction.

8. Students majoring in preschool education were tricked to intern as an assembly line worker. Due to this discrepancy and overtime work, some students went to the local labor bureau to file a complaint. The bureau then started an investigation. Since May 15, there have been no students working in the factory.

On June 6, 2017, China Labor Watch sent a letter, partial footage, and pictures as evidence to Ms. Ivanka Trump, and urged her to take actions and hold her brand company accountable under Chinese labor law.

China Labor Watch hopes that, as a direct or indirect sourcing partner with Huajian shoe factory, you understand the urgency of this matter. China Labor Watch believes that, as an ethical and competitive participant in the global economy, your corporate responsibility is essential to constitute a healthy supply chain market.

The three investigators who conducted this critical investigation are currently being detained and accused of interfering with a company’s normal operation and production activities by Chinese police. Saddened and appalled by the news, China Labor Watch sincerely invites you to join this crucial task force, to use your voice and help us advocate for the release of our investigators. If you need further information or help, please feel free to contact China Labor Watch via phone 212-244-4049 or email: clw@chinalaborwatch.org